A Gordian Knot for India and China: Foreign Policy Implications of Rajapaksa’s Return

October 26 would be remembered as a dreadful day in the political history of Sri Lanka, when a major upheaval shook the island nation, in the face of the abrupt sacking of the incumbent prime minister by the highest authority of the country. There persists a sense of ambiguity over the revived leadership of Mahinda Rajapaksa as the new prime minister of the island nation, with legislators seeking an interim order over his reappointment. The current turmoil stems from opposing candidates’ discord over policy and personal issues, which gradually built up to them accusing one another of flawed conceptualization of good governance and political responsibilities.

The catastrophe has been aggravated so much so that it is now posing ramifications with respect to Sri Lanka’s foreign relations in the South Asian space, in particular with India and China.

The most worrying aspect for India emerges from the prospect of a revival of the Sri Lanka-China ties. In light of the current political mayhem — wherein Maithripala Sirisena, the Sri Lankan president, dismissed Ranil Wickremesinghe, and installed his pro-Beijing predecessor, Mahinda Rajapaksa, as the new prime minister — the future of Indo-Lanka ties hangs in the balance.

The nation state’s ties with India are at the risk of fragility, chiefly because of the renaissance of the Rajapaksa reign, the pro-China leader with a history of ten-year rule in the country. At a time when other nations expressed their concerns over the dissolution of the Sri Lankan Parliament, Chinese President Xi Jinping was quick to convey his congratulatory wishes through the Chinese Ambassador to Sri Lanka within hours of Rajapaksa’s revived prime minister-ship.

Rajapaksa had, himself never shied away from purporting a pro-China stance. Chinese investments took a leaping turn between 2005 and 2015, precisely during his two presidential terms. From $16.4 million in 2005, China’s FDI jumped to $338 million in 2015, gradually allowing them to have a stronger hold on the Sri Lankan market. Relatively, by 2015, India’s FDI contributions stood at a paltry one-fifth to that of the Chinese. Around the same year, China had also become the largest ODA (Official Development Assistance) provider, a term used to measure international aid flow, to Sri Lanka.

Many have argued, developing economic control on Sri Lanka by China was aimed at tilting its influence away from India. The resurrection of China-Sri Lanka ties under Rajapaksa’s leadership could see Colombo deteriorating its relations with New Delhi, dampening Wickremesinghe’s attempts to reinstate international relations with fellow democracies, India and Japan. This turmoil — with a pro-Beijing leader at the helm, could lead to China returning to Sri Lanka with renewed vigor. Furthermore, Sri Lanka, with a pertinent geographical location, may prove to be of much efficacy for Chinese strategic interests. Thus, worries about China tacitly courting Sri Lanka as its military base in the Indian Ocean region, have been looming large amongst the US, Japan and India.

Its reliance on Chinese capital for economic, military and political support, had the country borrowing billions of dollars from Beijing towards the nation’s ambitious port projects to only experience ballooning of external debt. An instance being, the Hambantota Port Development Project which in hindsight only seemed destined to witness negative fallouts.

The project failed miserably in terms of drawing a desirable number of ships, ever-augmenting loans, and gradually losing the ownership to a state-owned Chinese firm on a 99-year lease in December 2017. Consequently, a win-win situation was materialized for China which it could have already been well aware of. This ‘strategic’ investment then, maybe indisputably construed as being a furtherance of China’s market reach and naval capacity – in-line with other such nations falling prey to its debt trap diplomacy.

Thanks to this calculated Chinese diplomacy, the Sri Lankan economy is today in the hands of deficits, debts and sluggishness, and a political crisis could very well act as an additional deterrent to its overall growth.

Meanwhile, India continues to fall short of China’s economic might, with China emerging as vastly exceeding India’s investment in the South Asian space. Chinese investment of US$ 10.64 billion vastly overshadows an investment of US$ 0.54 million from India, during 2016-18.

For some, the injection of capital from China holds short-term gains, as only a handful of countries are currently interested to invest in the land of serendipity. From getting infrastructure financing to being gifted a naval frigate, Sri Lanka for the long-run, however, has tactically been made to develop an over-reliance on Beijing.

One may argue, with China recently losing out on a pro-Beijing government in the Maldives, it would certainly not want to miss the Sri Lankan boat. Reliance on Chinese capital has proved fruitful to Rajapaksa’s ambitious projects, and his renewed leadership could see the Sri Lankan economy falling trap to the Chinese debt-trap diplomacy, yet again. Losing out on a like-minded democracy in the form of India with whom it shares historical ties would certainly not be a prudent option.

Rajapaksa’s return thus holds a repellent yet challenging prospect for India. Until the status quo is lifted, a Gordian knot is what all South Asian countries are faced with.

Header Image: REUTERS

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